Talgo ponders suing Wisconsin

Seattle-based Talgo, Inc. is considering legal action against the state of Wisconsin following the latter's long-expected cancelation of a $166 million maintenance contract.

Talgo, Inc., the U.S. subsidiary of Madrid, Spain-based Patentes Talgo, was manufacturing two trains in Milwaukee for Amtrak's Hiawatha Service linking Chicago and Milwaukee. A separate agreement with Wisconsin allowed Talgo to maintain the trains, aided by state payment for a maintenance base.

But the Wisconsin Legislature's Joint Finance Committee has deleted any funding for the maintenance base.

State Department of Transportation attorney Kathleen Chung has advised Talgo, Inc. that Wisconsin cannot make any payments required, and must terminate its agreement. Wisconsin also suggests that the costs of testing the Talgo trains have risen and also that federal officials have found the equipment fails Americans with Disabilities Act standards. Talgo, Inc. strongly denies those assertions.

The state still plans to pay for testing of the trains, Chung wrote.

Anticipating the state's move, on April 4 Talgo, Inc. said it would begin laying off workers involved in building the two trains on Milwaukee's north side. The announcement prompted Milwaukee Mayor Tom Barrett to criticize Gov. Scott Walker for continued opposition to passenger rail expansion, a campaign position Walker affirmed in 2011 with his highly publicized rejection of federal funds for higher-speed rail (HrSR) improvements linking Chicago, Milwaukee, and Madison, the state capital.